Local News

BOSTON (AP) ― A man who spent three decades in prison after the FBI withheld information that he'd been framed in a 1965 gangland murder was arrested Thursday on charges he ran an illegal gaming operation.

Peter Limone, 74, was picked up by state police at his home in Medford as part of an investigation into organized crime that netted three other arrests and a total of 140 indictments against 20 people, according to the Middlesex District Attorney's Office.

"We allege that Mr. Limone headed an extensive organized crime ring, engaging in crimes of illegal gaming, extortion, and loan-sharking throughout Middlesex County and greater Boston," District Attorney Gerry Leone said at a news conference.

Limone's lawyer, Juliane Balliro, called the arrest "completely unnecessary" since Limone would have appeared in court, had he been asked.

"This is an outrageous example of grandstanding by the Middlesex District Attorney's office," Balliro said. "I can't imagine why they'd want to inflict more psychological damage on Peter."

In the 1960s, Limone was a reputed leader of the New England mob when he and three other men were convicted in the slaying of Edward "Teddy" Deegan, a small-time hoodlum who was shot in an alley. Two of the men died in prison while Limone and Joseph Salvati spent three decades in prison before they were exonerated in 2001 when memos dating back to the Deegan slaying came to light.

Limone, Salvati and the families of the other men sued the federal government for malicious prosecution and won a total of $101.7 million. A federal judge ruled the FBI was trying to protect informants when agents encouraged a witness against the men to lie, then withheld evidence that the men did not commit the murder.

Leone would not discuss Limone's past or how this operation fit in the New England organized crime scene overall.

He said investigators were probing another, more loosely organized crime ring when they learned of Limone's complex organization.
 
Limone allegedly used a network of subordinates and rarely used the telephone while keeping a tight reign on the operation, Leone said. When his subordinates spoke of him, they called him "Chief Crazy Horse" and "the Camera Guy."

Limone charged tens of thousands of dollars in rent to four bookmakers who wanted to operate within Limone's territory, and took in hundreds of thousands of dollars in gambling funds, prosecutors said. Limone's men charged such exorbitant interest on debts -- 2 percent per week -- it was nearly impossible for debtors to pay them back, Leone said.

"It was a pay to play operation," he said.

Along with Limone, also arrested Thursday were three men Leone called upper-level cohorts: Anthony Squillante, 73, of Boston, who allegedly was the buffer between Limone and agents; Joseph DiPrizio, 50, who allegedly ran the central business office in Boynton Beach, Fla.; and Thomas Palladino, 75, of Malden, who is accused of being the main runner, handling payments and collections of debts.

The four men were to be arraigned Friday morning in Middlesex Superior Court.

Limone was charged with four counts of attempted extortion, criminal loansharking, organizing a gambling syndicate, keeping a gaming house, conspiracy to commit extortion, conspiracy to commit criminal loansharking, conspiracy to organize and promote gambling, conspiracy to keep a gaming house and conspiracy to use a telephone for gaming, which is a misdemeanor.

The charges carry sentences from two to 15 years, and a total of $35,000 in fines, Leone said.

Investigators raided his home in Medford and the business office in Florida in March, yet the ring continued to operate, despite being put on notice authorities were watching, Leone said.

The prosecutor said the second more loosely organized gambling operation was run by Steven Contrada, 54, of Wilmington, who was to be summoned to court along with 15 other people who were indicted. The investigation was continuing.

(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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